Create a 1 page essay paper that discusses Tax corporate.
For many small businesses such as Northwest Brand Inc. often all major business investors are employees of the firm (Thomas and Keith, 1994). The business can avoid double tax through distributing their earnings to the corporation’s staff in form of wages and fringe benefits. Although the individual workers have to pay income tax, the Northwest Brand Inc Corporation is able to deduct employee’s wages and other benefits paid to its workforce in form of business expenses hence firm can comfortably avoid paying tax on the expense amount. Similarly, small businesses distributions to employees who are owners of the business accounts for all of the company’s income, ultimately nothing are left that can be subjected to corporate tax. In a situation where the company’s income is left in the business, this will normally be retained in order to finance future business expansion. Thorough this amount will be subjected to corporate tax. The charged rate is often lower compared to those paid by individuals.